Independent Financial Advisors have provided yeoman's service to the Indian investors. The Securities and Exchange Board of India has been periodically bringing in regulations to regulate this industry in order to promote and protect the interest of the Indian Investors.

In consonance with the intent of SEBI, as an Industry the IFA's need to rise to the occasion and come together on a common platform to proactively interact with the policy makers and to educate and empower the members to render proper advice and service to the ever growing investor class in India.

The Sumit Bose committee submitted its report to the Government on 10th August,2015.

SEBI has invited Public Comments on recommendations with respect to Mutual Funds at para number 6.2.1 of the report by 12th October 2015.

The Foundation of Independent Financial Advisors,(FIFA) a pan India body of Independent Financial Advisors (IFAs) being a stakeholder gratefully acknowledges the opportunity provided by SEBI to submit its comments/suggestions. We are attaching herewith a brief profile on IFA (Independent Financial Advisors) model.

The Foundation has been invited earlier by SEBI and the Ministry of Finance in 2013 to discuss the steps needed to be taken to re-energise the Mutual Fund Industry.

The Foundation has joined hands with a number of other local/regional associations of IFAs to form an United Forum to represent IFAs across the country and submitted their consolidated feedback.

On behalf of the United Forum and the whole IFA community ,FIFA is are attaching herewith our comments on the recommendations with respect to Mutual Funds at para number 6.2.1 of the report.

We hope our feedback is considered by the SEBI while formulating its views.

There is a general perception of the industry that the TER (Total Expense Ratio) of Mutual Funds in India is extremely high. The 2015 edition of the Morning Star study "Global Fund Investor Experience Study June 2015" (hereinafter referred to as GFIE Report) covers fees and expenses for funds for 25 countries including India. This report was created to encourage a dialogue about global best practice for mutual funds from the perspective of fund shareholders.

We have carried out a STUDY ON EXPENSE RATIOS FOR MUTUAL FUNDS.

The objective of the study is to analyse the fees and expense ratios for the asset classes prevalent in India as compared to the global market for the domiciled funds.

Conclusions that TER in India is indeed high are drawn going by the reports of research agencies such as Morning Star without giving due consideration to all ingredients of the cost of ownership to the investor.

An in depth perusal of the Global Fund Investor Experience Study, the 2015 edition of Morning Star destroys the myth of India being one of the high T.E.R. countries.

Our study indicates:

According to the GFIE Report the Average Median Expense Ratio for money market funds in India is 0.18%. India is ranked as the 3rd least expensive country out of 25 countries reviewed in GFIE Report.

According to the GFIE Report the Average Median Expense Ratio for Fixed Income funds in India is 0.53%. India is ranked as the 6th least expensive country out of 25 countries reviewed in GFIE Report.

Money Market and Fixed Income Funds comprise of 9.14 trillion that is almost 2/3rd of the total assets managed by the Indian Mutual Fund Industry which is being managed at a weighted average cost of 0.40%.

In the GFIE Report, the TER for Equity Funds is shown as 2.65% for India. However, we carried out an independent study which indicates TER for Equity Oriented Funds as 2.07% (1.81% before Service Tax).

In case of equity funds, if the total cost of ownership i.e. front load charges + annual expense + advisory fees + platform access charges + performance fees, is considered then India is ranked as the 5th least expensive country out of 25 countries reviewed in GFIE Report.

We have written to Morning Star about the discrepancy observed in expense ratio for Equity Funds in India. The response from Morning Star has not been received till the time of writing this report.